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Net Worth Update – January 2014

Misc

This may be the most boring type of post I write, but it’s important to me to track my net worth so I can see my progress.  We are sliding smoothly from debt payoff mode to wealth building mode.

Our highlights right now are nothing to speak of.  We did let our credit card grow a little bit over the last couple of months, but paid it off completely at the end of December.  It grew mostly as a matter of not paying attention while we were doing our holiday shopping and dealing with some car repairs.

That’s it.  We haven’t remodeled our bathrooms yet, but we have the money sitting in a savings account, waiting for the contractor.  We haven’t bought a pony yet, but we did decide that a hobby farm wouldn’t be the right move for us.  We’ll be boarding the pony instead of moving, at least for the foreseeable future.

Our net worth is up $13,000 since September.  Our savings are up and our retirement accounts are down because there are two inherited IRAs that we need to slowly cash out and convert to regular IRAs.

Net Worth Jan 2014

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Paying For Heart Surgery When You’re Not as Rich as Randy Travis

Celebrities

Travis performs "Three Wooden Crosses"
Travis performs “Three Wooden Crosses” (Photo credit: Wikipedia)

Very sad news broke this week about Randy Travis. The country crooner, whose hits ironically include a song titled “From the Hard Rock Bottom of my Heart,” was hospitalized with a life-threatening heart problem that arose from viral cardiomyopathy, a condition that is characterized by a weakening of the heart muscle due to a virus. The virus that caused this disease is usually pretty harmless, but in some patients, extremely dangerous complications can arise. For Travis, the complications weakened his heart, and he required hospitalization and emergency heart surgery.

Travis is pretty fortunate, financially.  He is also pretty wealthy. Therefore, the costs associated with this problem are not likely to set him back financially like they would most Americans. How can people who are not rich like Randy Travis pay for heart surgery?

The easiest way to pay for a heart surgery is to let someone else pay for it. This tip may sound like a joke, but it is the way most people pay for heart surgery. Insurance is a risk management system in which many people pay premiums so that they do not have to bear the entire brunt of a financial loss. Some will come out ahead by paying less in premiums than the amount of the health benefits they will receive. Others will be on the opposite end of the stick. Health insurance can come from the private market or the public coffers through programs like Medicare and Medicaid. While there might be a copay for these procedures with insurance, the insured will not have to pay the whole tab.

Another way to pay for heart surgery is by raiding a retirement account. This is not really advisable in most instances, but desperate times can call for desperate measures. The money can then be paid back over time in the best-case scenario, and getting the doctors paid off will take a major burden off of the back of any heart patient.

Taking out a home equity loan can also be a way to pay for a heart surgery. Those who have some equity built up in their home can sometimes find enough to pay off some emergency bills. Of course, it usually takes years to build up this equity, so many will not have this option available to them.

One final way to pay off a heart surgery without being rich like Randy Travis would involve getting a second job. This might cut down on the amount of time available for cardiac rehab, but the doctor will want his or her cut. It is likely that the hospital will be even more serious about getting paid. This will especially be the case if the hospital is for-profit. It might take some time, but those who are able to survive the extra work should be able to eventually pay off their bills.

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Twitter Weekly Updates for 2010-07-17

Misc

  • RT @mymoneyshrugged: The government breaks your leg, and hands you a crutch saying "see without me, you couldn't walk." #
  • @bargainr What weeks do you need a FoF host for? in reply to bargainr #
  • Awesome tagline: The coolest you'll look pooping your pants. Yay, @Huggies! #
  • A textbook is not the real world. Not all business management professors understand marketing. #
  • RT @thegoodhuman: Walden on work "spending best part of one's life earning money in order to enjoy (cont) http://tl.gd/2gugo6 #

Work at Home Scams

Finance, Life

The idea of working from home is certainly appealing.  You get to set your own hours, sleep in some days, and be there when the kids get home from school.  You can be there when the packages get delivered and let the dog out before it’s too late.  Who doesn’t see the attraction?

Unfortunately, when something is so enticing, there will always be predators looking to take advantage of the dreams of others.  They dangle the “be your own boss” bait and reel in the people who their wishes overrule their judgment.

The ads are hard to resist.  “Make $2800 per month without leaving your home!” or “Stuff envelopes in your home for $1 per envelopes.”  I cases like these, the old saw tends to hold true: If it sounds too good to be true, it probably is.

Common work-at-home scams include:

Medical Billing

For only $499.99, you can purchase a “business opportunity”.  A lot of medical bill is actually done on paper so there is very real market for medical billing and processing.  Unfortunately for the respondents to these ads, the vast majority of this market is already taken by large companies with huge marketing budgets.  Finding enough customer to generate enough revenue to recover your investment is almost impossible, but you’ll never see that in an ad.

Envelope Stuffing

You answer an ad in the paper, sending $29.95 for a packet that will instruct you in the fine art of stuffing envelopes for $1 each.  When you get the information, you find out it is a letter instructing you to place an ad in the papers stating “Stuff Envelopes for $1 Each.  $29.95 for Information.”  This forces you to become the scammer, just to recover your costs.  Bad you.

Assembly or Craft Work

This one actually sounds like a business.  You invest in–for example–a sign-making machine for $1500.  The selling company promises to buy a quota  of signs from you each month.  After you buy the equipment and materials you spend countless hours making the product only to find out that either a) the company has disappeared or b) their undefined “Quality Standards” has rejected the work.  Nothing is ever up to standards.

That’s not to say there aren’t legitimate opportunities to make money at home.  Bob at Christian Personal Finance recently listed 24 legitimate home-based businesses, including blogging, eBay selling, wedding planning, car mechanic, and mobile oil changes.

Are you exploring any home-based business opportunities?

Answer: How Much Term Life Insurance Do I Need to Buy?

Finance

From a question posted here:

Thank you for all your help in my previous question. After meeting with the agent, I’ve decided on term life insurance over whole life. But I am still not sure how much term life I should buy. Should I buy as much as I could afford or some specific amount?

My answer(edited a bit):

That question is far too open-ended.

Are you married?  If yes, are you the primary breadwinner?  Do you have children?  Investments?  Savings?

Here’s my situation:

I am married, with three children.  I have the primary income.

We have a mortgage, a car payment, and some consumer debt.

I added up all of the debt as my base level of term life insurance.  My family will not be burdened with debt if anything happens to me.

To the base level, I added 5 years of my net income.  Without changing a thing, my family will be supported exactly as is for 5 years if I die.   They won’t, however, have the same level of expenses, due to the base level of insurance paying off all debt.   All of my living expenses also evaporate.  For example, there will be one car sold, one less mouth to feed and body to dress, etc.

I figure with the lower expenses and no debt, my insurance will support my family for 10 to 15 years if my wife manages the money right.   If she continues to work, it should last almost forever.

How do you figure the “right” amount of life insurance?[ad name=”inlineright”]